Northrop Grumman protests DISA’s
decision to reopen discussions and permit Pragmatics and Solers
to fully revise their proposals. The protester contends that
these actions competitively harm Northrop Grumman, because its
award price and evaluation ratings were disclosed. Northrop
Grumman asserts that DISA’s pre‑corrective action cost realism
analysis was substantively correct, and that the alleged error
that DISA was trying to correct was, at most, a perceived
failure to document the analysis as explicitly as agency counsel
would have liked. Northrop Grumman asserts that DISA has not
otherwise identified any substantive, prejudicial errors in the
cost realism analysis or initial award that required reopening
discussions. In this regard, the protester maintains that DISA’s
corrective action was unreasonable and disproportionate to the
alleged error, and yields no benefits to the procurement process
that would outweigh the competitive harm to Northrop Grumman.
DISA readily acknowledges that the disclosure of Northrop
Grumman’s winning price puts the protester at a competitive
disadvantage, but the agency argues that it reasonably
determined that reopening discussions was necessary to correct
deficiencies in its cost/price evaluation and to ensure that the
new award decision would be based on a fair best‑value
determination. As discussed above, DISA contends that its
pre-corrective action cost realism analysis and source selection
decision were inadequately documented and contained conclusory
statements that failed to explain the evaluators’ rationale for
finding that such vastly different proposals were realistic. In
this regard, DISA maintains that in taking corrective action,
the agency could not determine that its cost evaluators’
conclusions and DISA’s earlier best‑value determination were
reasonable, and that the other competitive range offerors were
not prejudiced. DISA argues that a more accurate and
comprehensive realism analysis could have a significant impact
on the agency’s best‑value tradeoff decision.
Northrop Grumman responds that DISA had more tailored options to
address the alleged evaluation error, such as seeking
clarifications, limiting discussions, or restricting Pragmatics
and Solers from revising their proposed labor mixes, FTEs, or
technical/management approach proposals. Northrop Grumman claims
that the evaluation notices that were provided to Pragmatics and
Solers had nothing to do with the alleged error, i.e., further
documenting DISA’s earlier cost realism analyses. The protester
also points out that simply because offerors propose different
technical approaches does not necessarily mean that their
proposals are unrealistic. Moreover, to the extent that DISA had
new concerns during reevaluation about the offerors’ proposed
labor categories, key personnel, or past performance projects,
Northrop Grumman complains that the agency should have addressed
such concerns during its pre-award discussions.
DISA disputes the protester’s assertion that the information
needed to perform a proper cost realism analysis could be
obtained through clarifications or limited discussions with the
offerors. Rather, DISA argues that in order to correct key
personnel discrepancies and unrealistic aspects of their
cost/price proposals, offerors would have to make corresponding
revisions to their technical/management approach proposals. In
this respect, DISA asserts that its cost evaluators could not
perform a proper realism analysis or recommend cost adjustments
without knowing what each proposed labor category would be
performing under each CLIN. DISA also maintains that its
discussions had to be meaningful and permit the offerors to
address new technical deficiencies that were uncovered as part
of the agency’s reevaluation. In any event, DISA contends that
it properly examined whether its earlier non-price evaluations
required further corrective action, because Solers specifically
protested the agency’s technical and past performance
evaluations.
Based on our review of the record and the parties’ arguments, we
find that any competitive harm to Northrop Grumman by the
disclosure of its award price, is outweighed by DISA’s
reasonable concern that its earlier best‑value determination was
tainted by a flawed cost/price evaluation that prejudiced other
competitive range offerors. Contracting officers in negotiated
procurements have broad discretion to take corrective action
where the agency determines that such action is necessary to
ensure a fair and impartial competition. The Matthews Group,
Inc. t/a TMG Constr. Corp., B-408003.2, B‑408004.2, June 17,
2013, 2013 CPD ¶ 148 at 5; Domain Name Alliance Registry,
B‑310803.2, Aug. 18, 2008, 2008 CPD ¶ 168 at 8. As a general
matter, the details of a corrective action are within the sound
discretion and judgment of the contracting agency. Evergreen
Helicopters of Alaska, Inc., B‑409327.3, Apr. 14, 2014, 2014 CPD
¶ 128 at 8. The decision whether to reopen discussions is
largely a matter left to the agency’s discretion. King Farm
Assocs., LLC; One Largo Metro LLC; Metroview Dev. Holdings, LLC,
B‑404896.10 et al., Dec. 5, 2011, 2012 CPD ¶ 6 at 11.
We have repeatedly observed that the possibility that the
contract may not have been awarded based on the most
advantageous proposal has a more harmful effect on the integrity
of the competitive procurement system than does the possibility
that the original awardee, whose price has been properly
disclosed, will be at a disadvantage in the reopened
competition. The Matthews Group, Inc. t/a TMG Constr. Corp.,
supra at 6, citing Jackson Contractor Group, Inc., B‑402348.2,
May 10, 2010, 2010 CPD ¶ 154 at 3; Partnership for Response and
Recovery, B‑298443.4, Dec. 18, 2006, 2007 CPD ¶ 3 at 3-4; PCA
Aerospace, Inc., B‑293042.3, Feb. 17, 2004, 2004 CPD ¶ 65 at 4.
Where the corrective action taken by an agency is otherwise
unobjectionable, a request for revised price proposals is not
improper merely because the awardee’s price has been exposed.
McKean Def. Group--Info. Tech., LLC, B-401702.2, Jan. 11, 2010,
2010 CPD ¶ 257 at 3. While we have recognized a limited
exception to that rule where the record establishes that there
was no impropriety in the original evaluation and award, or that
an actual impropriety did not result in any prejudice to
offerors, id., as explained below, DISA has presented both a
flaw in its cost/price evaluation requiring corrective action,
and a reasonable basis for reopening the competition.
With regard to the error in the agency’s cost realism analysis,
the record supports DISA’s assertion that the analysis was
insufficient and conclusory. DISA’s concern‑-that the evaluators
failed to explain their rationale for finding the vastly
different proposals realistic--provided a reasonable basis for
the agency to question its best‑value determination. See PCA
Aerospace, Inc., supra (dramatic price differentials may
reasonably be interpreted to suggest that offerors had
dissimilar understandings of the requirements and agencies are
not required to ignore the reasonable possibility that the
disparate prices received do not accurately reflect the
competitive marketplace, and that the award based on those
prices may not reflect the most advantageous proposal).
Moreover, the record demonstrates that the agency’s cost
evaluators overlooked the omission of a number of [DELETED] by
all three offerors, including Northrop Grumman.
We also find that DISA reasonably determined that it should
reopen discussions and permit the competitive range offerors to
submit fully revised FPRs. In our view, DISA was not required to
tailor the scope of its corrective action to clarifications or
limited discussions. Generally, offerors in response to an
agency request that discussions be opened or reopened may revise
any aspect of their proposals they see fit--including portions
of their proposals which were not the subject of discussions.
Partnership for Response and Recovery, supra (agency reasonably
believed that limiting price revisions was unworkable because of
the difficulty of linking pricing changes to particular
discussion questions and in view of the changes in the period of
performance that were necessitated by the prior protest).
Moreover, as part of its corrective action, an agency can, as
here, amend the RFP to add requirements that will require the
submission of revised proposals and is not required to limit
proposal revisions to only address these changes. Norvar Health
Servs.--Protest and Recon., B‑286253.2 et al., Dec. 8, 2000,
2000 CPD ¶ 204 at 4‑6.
As described above, during its reevaluation, DISA discovered
that the offerors’ (including the protester’s) FPRs contained
deficiencies and discrepancies in their technical, past
performance, and/or cost/price volumes. Where an agency
identifies new weaknesses in a proposal during a reevaluation of
that proposal in an acquisition where discussions have
previously occurred, the agency is required to discuss the new
weaknesses with the offeror. Lockheed Martin Simulation,
Training & Support, B‑292836.8 et al., Nov. 24, 2004, 2005 CPD ¶
27 at 10. The key fact in these cases is, as here, that the
concerns at issue relate to the proposals as they were prior to
discussions. Id. Moreover, the disclosure of the earlier
awardee’s contract price alone does not provide a compelling
basis for the failure to provide for meaningful discussions.
American K-9 Detection Servs., Inc., B‑400464.6, May 5, 2009,
2009 CPD ¶ 107 at 9. The possibility that an award may not have
been based on the most advantageous proposal because, for
example, discussions are not meaningful, has a more harmful
effect on the integrity of the competitive procurement system
than the fear of an auction; generally the statutory
requirements for competition take priority over any possible
concern regarding auction techniques. Id.; see Partnership for
Response and Recovery, supra.
In short, this is a matter in which the agency has considerable
discretion and, absent a showing that this discretion is being
abused, we will not substitute our views for DISA’s on how the
agency should undertake corrective action. McKean Def.
Group‑-Info. Tech., LLC, supra (protest challenging agency’s
corrective action, which included opening discussions with all
offerors in the competitive range, is denied where the agency
reasonably concluded that in addition to correcting the flawed
cost realism evaluation, discussions should be opened with the
offerors, rather than proceeding with award on the initial
proposals); see ZAFER Constr. Co., B‑401871.4, Feb. 1, 2010,
2010 CPD ¶ 66 at 3 (protest challenging agency’s corrective
action, which included allowing all offerors whose proposals
were in the competitive range to submit a revised proposal, is
denied where the agency reasonably concluded that offerors
should be given the opportunity to submit completely revised
proposals because the time lapse since proposals were first
submitted suggests that the original price proposals may no
longer accurately reflect the cost of the project).
The protest is denied. (Northrop
Grumman Systems Corporation B-410990.3: Oct 5, 2015) (pdf)
AMH also complains that the agency refused to disclose other
offerors’ prices to AMH, where GSA had disclosed AMH’s price in
debriefings provided to its competitors. AMH contends that GSA
was required to disclose all offerors’ prices to level the
playing field. We find this complaint to be without merit.
Where, as here, the termination of an awardee’s contract and
reopening the competition are otherwise proper, prior disclosure
of an offeror’s price does not preclude resoliciting or
reopening the competition. See Roxco, Ltd., B-277545, Oct. 27,
1997, 97-2 CPD ¶ 117 at 5. Here, in accordance with the
post-award debriefing requirements of the Federal Acquisition
Regulation (FAR), GSA properly disclosed AMH’s price to
disappointed offerors. See FAR § 15.506(d)(2). As a general
matter, an agency is not required to equalize the possible
competitive advantage flowing to other offerors as a result of
the release of information in a post-award setting where the
release was not the result of preferential treatment or other
improper action on the part of the agency. See Nova Techs.,
B-403461.3, B-403461.4, Feb. 28, 2011, 2011 CPD ¶ 51 at 4.
Moreover, any possible prejudice to the protester is mitigated
by a number of factors, including that the agency informed AMH
generally of its price standing vis-à-vis other offerors (that
is, that its price was mid-range); that the basis for award is
best value, and not price alone; and that the amendment of the
RFP to include the U.S.-flag vessel requirement and the optional
training task will result in different pricing. See Norvar
Health Servs.--Protest & Recon., B-286253.2 et al., Dec. 8,
2000, 2000 CPD ¶ 204 at 5, 6. (American
Material Handling, Inc., B-406739, Aug 14, 2012) (pdf)
Seven offerors submitted proposals and, after the initial
evaluation, both OSI's and AMSEA's were included in the
competitive range. Prior to conducting discussions, the
contracting officer sent an e-mail to each competitive range
offeror with a list of discussion items. AMSEA's e-mail included
a file with business, insurance, price, past performance, and
socioeconomic discussion issues for AMSEA and all other offerors
covering all three lots. Of primary relevance here, the file
included total price figures for OSI's proposal on Lots 2 and 3
and various discussion items common to all offerors concerning
Lot 1. Within minutes of receiving the e-mail, AMSEA's
vice-president, the sole recipient, notified the contracting
officer and explained that "[i]mmediately upon discovering the
content of the attachment and the scope of the error," he had
closed the attachment. Letter from AMSEA. According to the
vice-president, as directed by the contracting officer--and
without further accessing the e-mail--the vice-president deleted
the e-mail and its attachments, then emptied the trash folder to
ensure deletion of the information. Id.
The contracting officer notified all offerors of the e-mail
release, provided copies of the released information pertinent
to each, and evaluated the impact of the disclosure. Based on
her initial review, the contracting officer concluded that
release of the information would not alter the course of
discussions, and she proceeded to conduct discussions with AMSEA
and the other offerors in the competitive range. Contracting
Officer's Memorandum on Inadvertent Disclosure, at 3. After OSI
objected and asserted that the recipient of its Lots 2 and 3
pricing could "back into" OSI's Lot 1 price, the contracting
officer continued her review, specifically considering OSI's
objections. Based on her additional review, the contracting
officer again concluded that the released information would not
result in an unfair competitive advantage to AMSEA and proceeded
to obtain final proposal revisions (FPR). Contracting Officer's
Analysis of Procurement Impact of Disclosure, at 2. She
specifically required AMSEA to submit a narrative with its FPR
explaining any price changes from its initial proposal. Id.
Based on her review, the contracting officer concluded that
there was no indication in AMSEA's FPR that it had used the
information in the e-mail to its competitive advantage. FPR
Analysis of Procurement Impact of Disclosure, at 7. While AMSEA
lowered various prices, its overall FPR price remained
significantly lower than OSI's initial and FPR prices.
(sections
deleted)
Disclosure of
OSI's Information
OSI asserts that the agency's release of its pricing and all
offerors' discussion information to AMSEA was improper and
tainted--or gave the appearance of tainting‑‑the competition. In
OSI's view, AMSEA's changed FPR prices evidenced possible use of
this information and the agency relied on insufficient evidence
in concluding that AMSEA had not used this information to its
competitive advantage. OSI concludes that the agency's decision
to proceed with the competition was unreasonable and asserts
that the agency should terminate AMSEA's contract, cancel the
RFP, and re-compete its requirements.
The disclosure of source selection information, including an
offeror's price, during the course of a procurement is improper
and the agency may take remedial steps, including canceling the
procurement, if it reasonably determines that the disclosure
harmed the integrity of the procurement process. Information
Ventures, Inc., B‑241441.4, B-241441.6, Dec. 27, 1991, 91-2 CPD
para. 583 at 4-5. Where an agency decides that no remedial steps
are necessary, we will sustain a protest based on the improper
disclosure only where the protester demonstrates that it was in
some way competitively prejudiced by the disclosure. Kemron
Envtl. Servs., Inc., B-299880, Sept. 7, 2007, 2007 CPD para. 176
at 2.
While OSI makes numerous assertions in support of its claims,
the record reflects that the protester was not competitively
prejudiced by the release of information. For example, OSI notes
that AMSEA lowered its prices in six categories that were the
subject of discussion questions asked of all offerors--insurance,
support of government personnel on the Marine Corps ship, and
four transition rate categories. Each question was asked in
terms of the offeror's failure to meet a requirement or
confirmation of its understanding of the pricing categories. OSI
asserts that these questions would reasonably lead AMSEA to
believe that the offerors' initial prices indicated a lack of
understanding, and thus lead it to reduce its own prices. OSI
Comments at 8. However, as found by the contracting officer,
there is nothing in the record to indicate that AMSEA used any
of the released information as the basis for changing its
pricing, and AMSEA provided a reasonable, detailed explanation
for each change. In this regard, based on its decision to absorb
more risk, AMSEA [deleted], allowing it to reduce various
[deleted] rates. FPR Analysis of Procurement Impact of
Disclosure, at 3. AMSEA explained that its [deleted] on the
Marine Corps ship was based on RFP amendment 0014, which
designated the subsistence for these personnel as a reimbursable
expense instead of being included in its fixed-price per diem.
Id. at 4. AMSEA explained that its reduction in [deleted] rates
was based on its reliance on historical data from previous
experience. Id. at 4-6. In accepting AMSEA's explanations for
its FPR changes, the contracting officer considered the fact
that--with limited exceptions--there was no disclosure of
offerors' specific prices in any of the challenged areas, and
AMSEA's price position (fourth lowest price) did not change from
its initial proposal to its FPR. Id. at 3-6.
Apart from its assertion that AMSEA would more likely have used
its historical data to arrive at its initial--rather than
final--pricing, OSI provides no basis for questioning AMSEA's
explanations. Meanwhile, we think it is significant that AMSEA's
FPR price advantage (post-disclosure) over OSI (8.5% lower) was
only slightly less than its price advantage in the initial
evaluation (8.8% lower); OSI does not explain, and it is not
clear to us, why knowledge of a competitor's significantly
higher price would lead an offeror to lower its price further.
See Health Net Fed. Servs., LLC, B‑401652, Oct. 13, 2009, 2009
CPD para. 213 at 6; Kemron Envtl. Servs., Inc., supra, at 4. We
conclude that the agency reasonably determined that AMSEA's
price changes were based on its business judgment, changes to
the RFP, and its reliance on its own historical data, rather
than on the disclosed information. Accordingly, we find that the
agency reasonably concluded that disclosure of the information
did not result in competitive prejudice to OSI.
OSI asserts that cancellation of the RFP and elimination of
AMSEA are required because of the "appearance that the integrity
of the procurement process was compromised and unreliable." OSI
Comments at 10. However, as indicated, we will sustain a protest
based on an inadvertent disclosure of information only where it
is shown to have harmed the protester. It is undisputed that the
disclosure of OSI's information was inadvertent, and that the
agency and AMSEA proceeded appropriately once the disclosure was
discovered. Since, as discussed above, we find that OSI was not
competitively prejudiced by the disclosure, there is no basis
for us to sustain the protest and recommend the suggested
corrective action. (Ocean
Ships, Inc., B-401526.4, April 21, 2010) (pdf)
The agency's decision to limit the scope of its
corrective action was reasonable. While our Office had not
issued a decision or recommended any corrective action, NARA
took corrective action to remedy problems identified by our
attorney in the ADR conference regarding the past performance
evaluation and, at the same time, decided to obtain updated
information in the single area where it appeared reasonably
necessary. In this regard, LB&B had attempted to substitute some
of its proposed key personnel after it received the original
award, and CESI had protested this as a matter of "bait and
switch." While this ground of protest did not appear
meritorious, in view of the passage of time since the submission
of the offerors' last proposal revisions, the contracting
officer concluded that it would be beneficial to the agency and
fair to all offerors to obtain, and to base the re-evaluation
on, updated key personnel and subcontractor information. Agency
Report (AR) at 4; Contracting Officer's Statement at 2. We find
nothing unreasonable in this determination, since the apparent
premises underlying it-that the delay resulting from the protest
well may have affected the availability of the
originally-proposed key personnel, and that the evaluation
should be based on currently-available key personnel to the
extent possible--appear valid. The same considerations do not
appear to have applied to other areas of the proposals. In this
regard, prior to deciding to limit the scope of the corrective
action, the contracting officer consulted with the TEP and
confirmed that no other aspects of the submitted proposals
needed updating. AR at 4; Contracting Officer's Statement at2.
The agency's approach to determining the appropriate corrective
action here reflected its sensitivity to the fact that LB&B's
prices had been revealed when the original award was made. While
it may have been within the agency's broad discretion to permit
price revisions without regard for creation of an auction, the
agency was not precluded from taking this consideration into
account; there was nothing improper in the agency's choosing a
more limited approach to avoid creating a competitive advantage
that unquestionably would inure to the benefit of the protester
and other offerors if price revisions were allowed. See Rel-Tek
Sys. & Design, Inc.--Modification of Remedy , supra , at 5. (Consolidated
Engineering Services, Inc., B-293864.2, October 25, 2004) (pdf)
Where, as here, an agency has improperly conducted
discussions with only one offeror after receipt of
proposals, reopening the competition and seeking another
round of amended proposals is an appropriate way to
remedy the underlying deficiency and permit offerors a
fair opportunity to compete. International Res.
Group, B-286683, Jan. 31, 2001, 2001 CPD ¶ 35.
The disclosure of pricing and other information in
another offeror's proposal, as here, is permissible
because the possibility that the contract may not have
been awarded based on a true determination of the most
advantageous proposal has a more harmful effect on the
integrity of the competitive procurement system than the
fear of an auction; the statutory requirements for
competition take priority over any possible constraints
on auction techniques. Federal Sec. Sys., Inc.,
supra, at 4. Accordingly, the agency's
corrective action of disclosure and placing the offerors
on an even footing, and providing them with an equal
opportunity to compete by submitting new proposals is
unobjectionable here. (Networks
Electronic Corporation, B-290666.3, September 30,
2002) (pdf)
Where agency took corrective action
in response to an earlier protest by amending the solicitation
and reopening discussions, the prior disclosure of protester's
prices and the request for final proposal revisions did not
create an improper auction. (Clearwater
Instrumentation, Inc., B-286454.2, September 12, 2001)
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